DH Corp. defends accounting practices, calls hedge fund report ‘misleading’
Alexandra Posadzki, 27 October 2015
TORONTO – Financial technology company DH Corp. is defending itself against what it calls a “false and misleading” report from a hedge fund that casts doubts on its growth prospects and past performance. The report by Lawton Park Capital Management alleges the Toronto-based company (TSX:DH) is making “desperate” acquisitions and playing “accounting games” in order to obscure its dwindling performance. The report takes issue with DH’s approach to accounting for its revenue and alleges that “numerous” insiders of the company have been selling their shares, which could indicate trouble brewing that the public isn’t aware of.
DH released its quarterly earnings report earlier than planned and bumped up its conference call to discuss its results, originally slated for Wednesday, to Tuesday morning in order to address the allegations. The company, formerly known as Davis + Henderson in the days when it was primarily known for printing and supplying paper cheques for Canada’s big banks, says investors should rely on its public filings and not the analyst report. DH’s chief financial officer Karen Weaver said the company follows “disciplined accounting practices” that are in accordance with the International Financial Reporting Standards.
